QUOTE AND NEWS
SeekingAlpha Oct 27
Mondo Visione Feb 2
The Financial Industry Regulatory Authority (FINRA) announced today that it has expelled Phoenix-based Lawson Financial Corporation, Inc. (LFC) from FINRA membership, and has barred LFC’s CEO and President Robert Lawson from the securities...
Forbes Nov 4
Legendary investor Warren Buffett advises to be fearful when others are greedy, and be greedy when others are fearful. One way we can try to measure the level of fear in a given stock is through a technical analysis indicator called the Relative...
Benzinga Sep 29
Morgan Stanley’s Jenny Jiang believes China Life Insurance Company Ltd. (ADR) (NYSE: LFC) has made “dramatic” changes in its product strategy and business model over the last 18 months, which have led to a worsening of the...
Market Intelligence Center Nov 27
The patented algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center found a trading opportunity with China Life Insurance Co Ltd (LFC) that should provide a 7.30% return in just 140 days. Sell one Apr. '16 call at the...
Market Intelligence Center Oct 30
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered-call trade on China Life Insurance Co Ltd (LFC) that includes 11.89% downside protection. Sell one...
CNNMoney.com Oct 20
Read full story for latest details.
Market Intelligence Center Aug 31
After Friday’s trading in China Life Insurance Co Ltd (LFC) the option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center uncovered a trade that offers a 6.89% return, or 18.35% annualized (for...
Market Intelligence Center Aug 11
China Life Insurance Co Ltd (LFC) presents a trading opportunity that offers a 7.01% return in just 157 days. A covered call on China LIfe Insurance at the $18.33 level expiring on Jan. '16 offers an assigned return rate of 7.01% or 16.29%...
Market Intelligence Center Jun 5
After closing Thursday at $23.54, China Life Insurance Co Ltd (LFC) presents an attractive opportunity to get a 8.31% return in just 133 days, which is an annualized return of 22.81% (for comparison purposes only). To enter this trade, sell one...




TOP CONTRIBUTORS

China Life Insurance Company (China Life) is the leading insurance company in the People's Republic of China. Its products and services include individual life insurance, group life insurance, accident and health insurance. As of 2006, the Company had over 86 million individual and group life policies and annuities, and long-term health insurance policies in force. It also provides both individual and group accident, and short-term health insurance policies. Through its controlling shareholding in China Life Insurance Assets Management Co., Ltd. (AMC), the Company is an insurance asset management company, and an institutional investor in China.

China Life's market value of $129 billion is only behind American International Group's $186 billion, making it the world's second largest insurer.

The company's stock is traded in both Hong Kong and Shanghai, with ADR (LFC) listed on NYSE.

History of the Company

China Life traces its root from the privitization of the state-owned insurance operation. The following describes this complicated history [1].

On October 20, 1949, the People’s Insurance Company of China, or PICC, was established by the Chinese government as a nationwide wholly state-owned insurance company offering various types of insurance services. PICC achieved monopoly status in China’s insurance market by the mid-1950s, by which time all foreign insurance companies had withdrawn operations from China. The Chinese government suspended virtually all of PICC’s domestic insurance business, however, in 1958, lasting until the advent of economic reform in 1979, when PICC’s domestic property and casualty insurance business was resuscitated. PICC’s life insurance business resumed operations in 1982, with PICC being the only life insurance provider in China.

In 1996, PICC was reorganized as a holding company. The business of PICC was transferred to its four subsidiary companies: Zhongbao Property Insurance Company Limited, or PICC Property; Zhongbao Life Insurance Company Limited, or PICC Life; Zhongbao Reinsurance Company Limited, or PICC Reinsurance; and China Insurance H.K. (Holdings) Company Limited, or China Insurance H.K.

In January 1999, the holding structure of the PICC group of companies was dissolved. After this restructuring the original PICC Property inherited the PICC brand and was renamed People’s Insurance Company of China; the original PICC Life was renamed China Life Insurance Company; the original PICC Reinsurance was renamed China Reinsurance Company, which was recently restructured into China Reinsurance (Group) Company, China Property & Casualty Reinsurance Co, Ltd., China Life Reinsurance Company and China Continent Property & Casualty Insurance Company Ltd.; and all overseas business institutions and operations owned by the former PICC group of companies were allocated to, and administered by, China Insurance H.K. After 1999 and prior to the restructuring described below, CLIC was the only wholly state-owned insurance company licensed to operate life insurance business in China.

CLIC has experienced rapid development in recent years. In 2002, its total insurance premiums represented 57% of the total life insurance premiums in China. A joint stock company pursuant to the PRC company law on June 30, 2003 was formed under the corporate name of China Life Insurance in connection with the restructuring.

On November 23, 2003, an asset management joint venture was established with our predecessor, CLIC, in connection with the restructuring. The asset management joint venture manages China Life's investment assets and, separately, substantially all of those of CLIC.

Industry and Competitions

As of 2006, the number of working people with basic endowment insurance in China was 141 million, accounting for 18.5% of the total employed population. Calculated at the average growth pace of 6% in the recent 4 years, plus the increase of employed population, the coverage rate of basic endowment insurance can not reach 100% in 30 years [2].

The majority of the income of Chinese citizens is deposited in banks, but not used to buy insurance. In 2005, the saving deposits amounted to over $1.8 trillion USD, while the insurance premium revenue was just $39.6 billion USD, equal to 2.2% of the newly-increased bank deposits.

Generally, the annual compounded growth rate of China life insurance industry will be ~16% from 2007 to 2010, the life insurance scale will reach RMB 767.6 billion in 2010, and RMB 2 trillion in 2020, but the figure is still small compared to the current saving deposit scale of RMB 17 trillion.

The growth rate of China life insurance industry is among the highest among the main countries in the world. ~16% figure is comparable to India, more than twice of Korea and much higher than the 2.5% of the US.

The market shares of the top 3 insurance providers in China are:

China Life competes fiercely with Ping An for the top spot in China insurance industry. Product percentage comparison between China Life Insurance and Ping An Insurance in 2005, is shown below:

Image:Lfc rev.bmp





Footnotes

  1. 2003 Annual Report
  2. China Life Insurance Market Report, 2006-2007, ResearchInChina